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Manegerial Economics > Semi-Finals > Flashcards

Semi-Finals Flashcards

1
Q

A venue where consumers and suppliers of goods transact on buying or selling of any items

A

Market

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2
Q

Sets the amount of good or service to be rendered and most importantly the price that the output is going to be sold or bought.

A

Market

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3
Q

market price agreed by the seller to offer its good or service for sale and for the buyer to pay for it.

A

Equilibrium market price

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4
Q

Specifically it is the price at which quantity demanded of a good is exactly equal to the quantity supplied.

A

Equilibrium market price

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5
Q

A state of balance between demand and supply

A

Equilibrium market price

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6
Q

the given price in which the quantity demanded, and the quantity supplied are equal.

A

Equilibrium market price

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7
Q

What does the buyers and sellers do when there is an equilibrium price?

A
  • buyers are buying all the goods they desire
  • sellers are selling all the goods they desire
  • there is no pressure for the market price to change.
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8
Q

When there is more demand (increases) than the supply (decreases) when the price drops

A

Shortage

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9
Q

When there is more supply (increase) than the demand (decrease) when the price increases

A

Surplus

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9
Q

Where is shortage in the Equilibrium?

A

Below

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10
Q

Where is surplus in the Equilibrium?

A

Above

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11
Q

What are the y-axis and x-axis in the market Equilibrium for Labor?

A

Y-axis : Wage rate
X-axis: Quantity Labor

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12
Q

Who are the suppliers in the labor market?

A

the people, individual
they are the ones who supply themselves with job

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13
Q

Who demands from the labor market?

A

employers or business owners.

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14
Q

what does lower wage rate means?

A
  • decreased supply for labor
  • increased demand for labor
  • Employers will look for other people who are willing to work for them.
  • A shortage of labor will happen.
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15
Q

What does higher wage rate mean?

A
  • increased supply for labor
  • the demand for labor will decrease
  • People will be encouraged to offer themselves to the labor market.
  • A surplus in the labor market will happen.
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16
Q

The specification by the government of minimum prices for certain goods and services.

A

Price control

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17
Q

The price may be fixed at a level below the market equilibrium price or above.

A

Price control

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18
Q

What are the two price controls that the government implements?

A
  • Floor price
  • Ceiling Price
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19
Q

What kind of harm does surplus do?

A

It can cause the producers to lose

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20
Q

What kind of harm does shortage do?

A

Abuse the consumers

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21
Q

Where is the price floor in the equilibrium?

A

Above the Equilibrium

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22
Q

The legal minimum price imposed by the government on certain goods and services

A

Price Floor

23
Q

This is undertaken by government if a surplus in the economy persists.

A

Price floor

24
Q

It is a form of assistance to producers by the government for them to survive in their business

A

Price Floor

25
Q

Where is the price ceiling in the Equilibrium?

A

Below

26
Q

The legal maximum price imposed by the government

A

Price Ceiling

27
Q

This price control is only a remedy, not a solution

A

Price Ceiling

28
Q

This is undertaken by the government if there is a persistent shortage of goods.

A

Price Ceiling

29
Q

Imposed by the government to protect consumers from abusive producers or sellers who take advantage of situations such as occurrence or calamity.

A

Price Ceiling

30
Q

What is demand equation?

A

Qd = a – bP

31
Q

Supply Equation

A

Qs = c + dP

32
Q

How to solve the Equilibrium Price?

A

Qd = Qs

33
Q

This quantifies or measures the sensitivity of response of the quantity demand to the change in price of the good or service.

A

Price Elasticity of Demand (PED)

33
Q

What is Price Elasticity of Demand (PED) computed based on?

A

Percentage Change

34
Q

What is the formula for Price Elasticity of Demand (PED)?

A

PED = Change in Qd / Q1 x 100 ÷ Change in Price / P1 x 100

35
Q

Why is the coefficient of elasticity (PED) negative?

A

due to the opposite relationship between the price of the product and the quantity demanded for the product

36
Q

The coefficient of elasticity is _______?

A

Absolute Value

36
Q

If PED is greater than 1 (PED > 1)?

A
  • The good is elastic
  • The good is nonessential
  • Buyers are sensitive to its price
37
Q

If PED is less than 1 (PED < 1)

A
  • The good is inelastic
  • The good is essential or important good
  • Buyers show little response to the change in its price.
38
Q

If PED is equal to 1

A
  • Unitary Elastic
  • There is a proportional variation or change in the Qd and the price of the product.
39
Q

If PED is infinite

A
  • Perfectly Elastic
  • The good is nonessential
  • When seller increases the prices of his product, no one will buy from him.
40
Q

if PED is zero

A
  • Perfectly Inelastic
  • The consumer still buys the exact quantity of product regardless of the price.
40
Q

calculates how the supplier respond to the variation of products’ price in the market.

A

Elasticity of Supply / Price Elasticity of Supply (PES)

41
Q

What is Elasticity of Supply (PES) computed based on?

A

percentage changes

42
Q

What is the formula for Elasticity of Supply (PES)?]

A

PED = Change in Qs / Q1 x 100 ÷ Change in Price / P1 x 100

43
Q

signifies the sensitivity of quantity demanded to the percent change in income of the consumers.

A

Income Elasticity of Demand (Ei)

44
Q

What is the formula for Income Elasticity of Demand (Ei)?

A

Ei = Change in Qty / Q1 x 100 ÷ Change in Income / Y1 x 100

Qty is Qd
Y is Income

45
Q

A positive Income Elasticity (Ei) means that?

A

it is a normal good

46
Q

A negative Income Elasticity (Ei) means that?

A

it is an inferior good.

47
Q

This computes how the demand quantity of a certain product changes as the price of related good changes.

A

Cross Price Elasticity of Demand

48
Q

computes how the demand for a good respond to the change in the price of its substitute.

A

Cross Price Elasticity of Demand

49
Q

What is Formula for Cross Price Elasticity of Demand?

A

Ec = Qₓ₂ - Qₓ₁ / Qₓ₁ x 100 ÷ Pᵧ₂ - Pᵧ₁ / Pᵧ₁ x 100

50
Q

If the value of Cross Price Elasticity is positive (+), it means?

A

it’s a Substitute good

51
Q

If the value of Cross Price Elasticity is negative (-), it means?

A

it’s a Complement good

52
Q

If the value of Cross Price Elasticity is zero, it means?

A

The two products are unrelated

Manegerial Economics (3 decks)

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